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Delaware unemployment holds at 5.1%

Steve Wright and Barbara Klenk operate BNE Subs in downtown Wilmington. Wright has been making lunches for DuPont Co. employees for 30 years, and has seen the workforce at the company's corporate headquarters across the street dwindle from 7,000 to as few as 700.(Photo: DANIEL SATO/THE NEWS JOURNAL)Buy Photo

Delaware’s jobless rate in November held at 5.1 percent for a second month in a row, according to preliminary data from the state Department of Labor.

November also marked the second-straight month that the state’s unemployment rate has lagged behind the national rate, which also held steady from October at 5 percent.

After a year of declines that brought Delaware’s jobless rate to the lowest level since 2008, the state has recorded slight upticks in five of the last seven months, a cumulative increase of 0.6 percent since April.

The state's unemployment rate is now the highest it has been in 2015, although still slightly less than the 5.2 posted in November 2014.

Economists say, though, that the recent upticks actually may be a byproduct of a healthy economy.

That's because many of those who stopped looking for work during the recession – the population many critics like to point as evidence of a stagnant economy – are now looking to re-enter the job market.

"Some of these slight upticks we're seeing is a factor of simple algebra," said Kurt Rankin, an economist for PNC Financial Services Group. "Growth in Delaware's labor force is quite strong with more people feeling confident enough to identify themselves as looking for work again."

Since the end of September, about 6,800 workers have entered the state’s labor force for the first time, while another 9,100 workers have re-entered the labor force after not actively seeking a job for a month or more, according to the state Department of Labor.

As those people start being counted as job-seekers by the Labor Department, the unemployment rate appears to be growing.

In reality, the number of Delaware residents with jobs has increased by 13,700 since last November, while the number of unemployed workers has fallen by 400 workers, said George Sharpley, an economist with the state Labor Department.

“That shows the state is doing a relatively good job of absorbing new entrants into the labor force,” he said.

Since November 2014, the number of seasonally adjusted nonfarm jobs in the state has increased by 6,200, a rise of 1.4 percent, although that lags the 1.9 percent seen nationwide. Seasonally adjusted nonfarm employment grew by 2,500 jobs from October to November, according to the department’s latest jobs report.

“Unfortunately, the seasonal adjustment is always a bit problematic because the change to seasonal jobs is faster than the stats can keep up with,” Sharpley said. “I would expect to see future reductions in the rate with December having a better chance of the rate going down than going up.”

As long as jobs continue to be added in Delaware, Rankin said he expects the state's unemployment rate to begin falling again by the second half of 2016.

"I think 5 percent is really the number we want to shoot for," he said. "And we're just a little above that now."

It remains to be seen, however, impending layoffs at DuPont Co., the Chemours Co. and AstraZeneca will impact the state’s unemployment rate in the coming months.

The loss of those higher-paying jobs could have a direct impact on employment in other industries, including retail – already the hardest hit sector in Delaware with 1,600 fewer jobs since last November. Leisure and hospitality, the state’s fastest growing sector, also could be impacted. That industry added 600 jobs since October, bringing the net increase to 1,900 jobs since November 2014.

The latest month-to-month data indicates the state’s professional and business services sector also is seeing a growth spurt, with 2,200 jobs added since October for a net 1,400 positions over the last year.

Construction jobs, meanwhile, continued their seasonal decline, falling by 1,100 positions since September.

On a positive note, county-level unemployment rates, which are not seasonally adjusted, saw some significant reductions over the last month.